Dark Fiscal Future for Schools

Supervisors Predict Less Tax Revenue

For the first time, Prince William County, which has one of the region's fastest-growing school systems, could see its education budget shrink in the coming year because of plunging house values and a likely residential property tax cut.

As a result, School Board members said in recent interviews, the county could be forced to eliminate teachers' raises, increase class sizes and delay opening an 11th high school. The latter scenario is especially contentious because the campus is meant to alleviate crowding at nearby schools saddled with trailers.

The school system, Virginia's second largest with 73,000 students, is preparing a spending plan that could be as much as $48 million less than the $860 million operating and debt service budget for the fiscal year that began in July. Across Northern Virginia and Maryland, many suburban school systems are reporting budget troubles.

School officials said Prince William has never had a "negative budget," with a year-to-year reduction in spending. On Nov. 18, the Board of County Supervisors, determined to give homeowners relief in the national financial crisis, approved preliminary budget guidance that would result in an average tax bill reduction of 18 percent, or about $600 per home.

The guidance, based on a tax rate of $1.13 per $100 of assessed value, is meant to give school and county officials help in crafting fiscal 2010 budgets. Supervisors are scheduled to lock in a tax rate next year.

If approved, the tax cut would result in about $28 million less in county funds than current levels, school officials said. The school system also is projecting up to $20 million less in state funds.

The forecast could threaten initiatives meant to raise the school system's academic profile. Prince William has made strong progress on state test scores but has had lower SAT scores and lower teacher salaries compared with Northern Virginia's other major school systems. Its growing enrollment includes a significant population of students from immigrant families who are learning English.

"Obviously, it's going to be a difficult year, at the rate the Board of Supervisors has given us. We're looking at a decrease from the current year of spending," said Prince William School Board Chairman Milton C. Johns (At Large). "That will have a dramatic effect. But it's not a time for panic."

Board of Supervisors Chairman Corey A. Stewart (R-At Large) said the 18 percent tax cut is a "fairly concrete goal" among supervisors. "The school system has a very difficult job, but it's doable to reduce spending without dramatically impacting schools," he said. "There are examples across the country of school systems that don't have a lot of money and are stellar."

To meet the challenge, Superintendent Steven L. Walts is proposing that each of the county's 88 schools should hold in reserve 1 percent of its budget, which could result in about $6.7 million in total savings.

Also, School Board members have been working with state Sen. George L. Barker (D), whose district includes Fairfax County and parts of Prince William, to draft a bill to allow certain localities to set different tax rates for commercial and residential properties, which could increase taxes slightly and boost school revenue. Under state law, localities must now set the same tax rate for businesses and residents, which is meant to shield business owners from bearing the brunt of a community's taxes.

School Board Vice Chairman Grant Lattin (Occoquan) said the proposal, still in preliminary discussions among staff in the General Assembly, could allow supervisors to feel more comfortable setting a slightly higher tax rate on residents and a separate tax rate on businesses.

Given the supervisors' tax guidance, Lattin said the School Board will consider having no teacher raises and delaying the construction of the high school in the Kettle Run area. "I will be shocked if there are any raises for employees and surprised if we have any significant capital improvement projects," he said.

At Lattin's request, the School Board will debate in December whether to sign a construction contract to start building the high school in the Kettle Run area. If the School Board votes to hold off, it could save nearly $2 million in the next fiscal year, said David Cline, Prince William's associate superintendent for finance and support services. But it would also mean that nearby schools would remain overcrowded.

Stewart said the school system should continue with construction of the high school. "We, at the county level, we're cutting by the same percentage," he said. "But we're moving forward with our projects."

Bonnie Klakowicz, president of the county's major teacher union, said teachers are hoping to avoid layoffs and receive annual step increases in compensation for years of experience. "People would be very upset if they didn't get that," she said. "But I don't think they are looking to get a [cost-of-living] raise this year, as they have in the past."